But there's also concern that an emerging technology using high-powered lasers to produce highly enriched uranium could be used for clandestine weapons programs, either by rogue states or terrorists.

And that laser technology is known to be developed in just one part of the world - Sydney.

And as Jonathan Harley reports, it's an operation wrapped in secrecy.

JONATHAN HARLEY: The leafy streets of southern Sydney seem to be a perfect setting for the suburban dream.

But this idyllic neighbourhood has a quiet and mysterious resident, for nestled in its midst is Australia's only nuclear research facility.

For decades the Australian Nuclear Science and Technology Organisation, which runs Lucas Heights, has maintained its reactor is solely for the purposes of scientific research and the production of isotopes vital for nuclear medicine.

But there's more going on at Lucas Heights than meets the eye.

DR EDWIN LYMAN, UNION OF CONCERNED SCIENTISTS: I do not think it is prudent today to be developing advanced enrichment technologies that would make it potentially easier for terrorists to get nuclear weapons.

DR JOHN LOY, ARPANSA: So I don't think there is any risk to general public health and safety.

I have to qualify that by saying provided the rules are followed.

RICHARD BROINOWSKI, FORMER DIPLOMAT & NUCLEAR RESEARCHER: My point is it's a dangerous weapons-capable technology being developed in Sydney secretly with the Australian Government knowing about it.

And it erodes and degrades the Australian Government's own non-proliferation pretensions.

That's a problem.

JONATHAN HARLEY: In a corner of Lucas Heights sits a publicly listed but little known private company.

It's called Silex Systems Limited.

The company takes its name from a sophisticated process for enriching uranium.

If Silex succeeds in making this process commercially viable, it could revolutionise the nuclear power industry.

DR FRANK BARNABY, FORMER BRITISH MILITARY PHYSICIST: Well, this enrichment technology is an excellent way of enriching uranium from a commercial point of view because it uses less power and is therefore cheaper.

JONATHAN HARLEY: Since observing the British nuclear tests at Maralinga in 1953, Dr Frank Barnaby has kept a close interest in Australia's nuclear program.

For much of his career, the nuclear physicist has worked with the British Atomic Weapons Establishment and Dr Barnaby is concerned the Silex technology could spawn more weapons of mass destruction.

DR FRANK BARNABY: The risk of terrorists getting primitive nuclear explosives is real and I think it's only a matter of time before they do because it is relatively simple in this day and age to find out how to and to actually produce a primitive nuclear weapon.

JONATHAN HARLEY: Frank Barnaby is not alone.

Experts around the world are worried the Silex process could also make it much easier to produce nuclear weapons in secret.

DR EDWIN LYMAN: No-one today should be in the business of making uranium enrichment simpler, cheaper, faster.

JONATHAN HARLEY: Enriched uranium is the central ingredient of nuclear power reactors and nuclear weapons.

Specific burnable radio isotopes must be separated and concentrated.

That's the enrichment process.

The conventional method is known as the centrifuge process but it's cumbersome, costly and very hard to conceal.

RICHARD BROINOWSKI: If you develop a new technology which uses far less power and far less capital equipment in buildings, then it's a much cheaper way to enrich uranium.

JONATHAN HARLEY: Nuclear scientists have long been trying to use lasers as a cheaper way to enrich uranium.

To this day, the precise methods remain a secret.

But what is known is that high-powered lasers are tuned to the vibrational frequency of the burnable isotope to be enriched.

This causes the atoms of the targeted isotope to vibrate, become separated, ultimately resulting in the enriched product.

It's called separation of isotopes by laser excitation, or Silex.

Here at the security perimeter of Lucas Heights is as close as we can get to Silex Systems Limited.

The company plays its cards close to its chest and that's understandable.

It estimates the global uranium enrichment market to be worth $3.5 billion.

But wherever there's nuclear technology, inevitably questions of health and safety and national security will follow.

At the core of this story is one key question - how much do Australians need to know about our nuclear research programs?

Silex Systems believes it has the answers to providing cheap, clean energy in an age of global warming.

But it's also an age of terrorism and experts fear that the Silex process could just as easily be used to enrich uranium for nuclear weapons as nuclear power, so-called dual-use technology.

DR FRANK BARNABY: You can't separate the two because if you can enrich uranium up to 95 per cent or so needed for nuclear power reactors.

Then by putting it through the system time and again, you can get it up to the 93 per cent needed for nuclear weapons and therefore it's a dual purpose technology, usable for both purposes.

JONATHAN HARLEY: Frank Barnaby's worry is that if the Silex technology fell into the wrong hands, as has happened with previous uranium enrichment technologies, it would contribute to nuclear proliferation.

DR FRANK BARNABY: So it is of considerable concern from a nuclear weapon proliferation point of view, particularly for clandestine production.

JONATHAN HARLEY: Silex Systems and the authorities which regulate it insist the company operates under the strictest safeguards.

But last week the Defence Minister, Robert Hill, made a troubling admission about where Australia's nuclear technology may end up.

Appearing at an international conference on the proliferation of weapons of mass destruction in Sydney Senator Hill acknowledged Australia may have already unwittingly exported nuclear technology used to make weapons.

SENATOR ROBERT HILL, DEFENCE MINISTER: They can be exported quite innocently and there have been suggestions that some may have been exported from Australia innocently that have been used within WMD.

JONATHAN HARLEY: In contrast to Senator Hill's frank admission, there appears to be great reluctance to shine light on Silex operations.

The company has declined repeated invitations to appear on the 7:30 Report.

Its research is wrapped in a double shroud of silence - an official restricted data classification and the claim that the material is commercial-in-confidence.

It's been left to the regulators to front the cameras.

JOHN CARLSON, AUSTRALIAN SAFEGUARDS & NON-PROLIFERATION OFFICE: It's not wrapped in secrecy.

My office has been reporting on Silex in detail since we first issued them a permit in 1997.

JONATHAN HARLEY: Detailed concerns about Silex were raised last week by Greenpeace, and former ambassador and author on Australia's nuclear program Richard Broinowski is urging for greater explanation about Silex.

RICHARD BROINOWSKI: The problem is we know very little about Silex.

We know very little about its antecedents or who owns it.

We don't know what its corporate plan is.

We don't know who it's going to sell the stuff to, the technology to, or whether it could be leaked or stolen from Silex.

JONATHAN HARLEY: The authority monitoring radioactive materials, including waste produced by Silex, is the Australian Radiation Protection And Nuclear Safety Agency, ARPANSA.

It believes concerns about Silex are overblown.

DR JOHN LOY: Within the operation itself, they have to follow the standards and rules that apply to laboratory practices, using radioactive sources.

In many ways it is quite a simple operation there and no more complex than many operations that go on in laboratories throughout Australia using radioactive sources.

DR EDWIN LYMAN: Now a country like Australia, which is continuing to pursue research and development in laser enrichment of uranium, seems to be bucking the trend of the international community which would be to try to restrict uranium enrichment activities, both experimental and production-oriented to a small number of countries as possible.

JOHN CARLSON: That's why we have security measures on the equipment.

Clearly, we are ensuring that it doesn't fall into the wrong hands, but we don't believe it would be a technology of choice for a proliferator in any event because of very substantial difficulties in manufacturing the components for it and so on.

RICHARD BROINOWSKI: This is something we need to be very transparent about and the Australian Government, the Howard Government, owes a responsibility to say what is going on.